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- Digital Legends has a 3D fantasy game which they say is better on the iPhone than any other mobile gaming device

Now for more on what users can expect with software update 2.0. They'll also be able to view iWork and Microsoft Office documents with full support. Emailed images can now be saved to your photo library. The calculator goes scientific when tilted sideways. Parents now have increased control of what can be accessed on their child's iPhone. Finally, since the iPhone is going global, the device now has massively increased international language support, including Asian character support.

The update comes in early July and is free for iPhone users, but $9.99 USD for iPod Touch owners.

With that Steve left the stage open for Phil Schiller to demonstrate Apple's new MobileMe service which they billed as "Exchange, for the rest of us". The idea is that the service will use whatever networks are avaliable to it to keep everything (Mail, iDisk, iCal, iPhoto, Address Book etc.) up to date on everything (iPhone, Mac and even your PC). These applications can also be accessed from any computer over the internet using sophisticated web applications.

Mobile Me will be available along side the iPhone update in early July and will replace the .Mac service. A 60 day free trial is available and all current .Mac users will be automatically upgraded for free.

Then Steve came back on stage to give iPhone Fans what they'd really been hungering for, an iPhone hardware update (and a cheaper price to boot!).

The new iPhone supports 3G, a faster mobile network designed with high data transfer rates in mind. How much faster? 2.8 times faster than the current iPhone on the Edge network. Jobs also reckons that the iPhone uses 3G at least 36% faster than other Nokia and Palm 3G phones

CEO Steve Jobs said Apple had learnt a lot from it's first iPhone as he revealed that the new one now has black plastic back, firmer metal buttons, a flush headphone jack, better audio quality, a much better battery...

...and yes, new iPhone also supports GPS. This will give users a much more reliable location in the Google Maps application.

The new battery provides 300 hours of standby, 5 hours of 3G talk-time (10 on 2G), 5 to 6 hours of high-speed browsing, 7 hours of video and 24 hours of audio.

The new iPhone will be cheaper than ever, thanks to generous subsidies from mobile carriers. The 8GB version will be just $199 USD and the 16GB will be $299 USD. And one more thing, the 16 Gig version is also available in white.

The 3G iPhone is avaliable in 22 countries from July 11th.

The impressed crowd was then shown an ad for the new iPhone (apparently so impressive that they showed it twice) and then a round of applause was given to the iPhone engineering team.

Steve left the stage to thunderous applause, as if his ego needed any more of a boost.

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